Senate worries over looming Bankruptcy of States
A motion sponsored by  Senator Olubunmi A. Adetunmbi, (Ekiti North) for debate in the Senate has highlighted the serious and distressing financial crisis in Nigeria. In a motion entitled “Looming Danger of Bankruptcy in States: The Need for Fiscal Evaluation” Senator Adetunmbi raised great concern about the great fiscal challenge, looming insolvency and bankruptcy facing several states in the country, most of it associated with huge wage bill.
In his motion, Senator Adetunmbi cited a report issued by Nigeria Governor’s Forum which reveals that 20 states in Nigeria are faced with financial crisis. Some of the states listed as distressed and critical are Kano, Sokoto, Niger, Zamfara, Katsina, Osun, Ekiti, Plateau, Benue, Edo, Borno, Adamawa, Cross River, Enugu, Taraba, Ogun, Kogi, Yobe, Ebonyi, Ondo and Kaduna. States listed as unhealthy are  Oyo, Bauchi, Bayelsa, Nasarawa, Gombe and Rivers . Only 9 States, Imo, Kwara, Lagos, Kebbi, Delta, Abia, Akwa Ibom, Anambra and Jigawa are listed as being in a tolerable or healthy financial situation.
Senator Adetunmbi is calling for the review of the revenue sharing formula between the Federal, State and Local Government to address this challenge.
It will appear however that the entire country is in big financial crisis. In a period of high oil sales and huge oil receipts, it is an irony that the country is bedeviled by major financial crisis. Observers point out that the 2011 national budget was abandoned even before the April 2011 general elections. Most of the projects stated in the budget have not taken off nor are they likely to be implemented, with only two months to the end of the year. The Nation’s foreign reserves have been severely depleted and the exchange rate of the Naira has worsened.
Analysts worry that corruption level in the country may also have risen especially in the last few months, with little effort being made by the government to ensure proper application of resources to projects. Value for money no longer appears to be important.
Senator Adetunmbi’s motion was passed and the Senate’s Committee on Finance, Appropriation was asked to follow up on the matter.

http://placng.org/home/index.php?option=com_content&view=article&id=104:senate-worries-over-looming-bankruptcy-of-states&catid=37:feature-storied

I'm sure the rest of 'Africa' will come to our aid and bail us out.

Otherwise the good old IMF/World Bank will come to our aid.

and some people are talking about creation of more states.

by the way how do we stop the bankruptcy

Failure to pay workers salary will be met with stiff opposition. They dare not try civil servants, else this country go burn o.

asha 80:

and some people are talking about creation of more states.

double the population of nigeria!!! Other African countries like somalia etc will bail us out after they also double their population.

27 states face bankruptcy
•Abia, A’Ibom, Anambra, Jigawa healthy
•Senators urge merger of states
From ADETUTU FOLASADE-KOYI, Abuja
Friday October 28, 2011


Photo: Sun News Publishing

More Stories on This Section

From the Senate came the gloomy news yesterday that the financial accounts of 27 states are in the red as some of them have been declared either “distressed” or “gloomy.” Only Abia, Akwa Ibom, Anambra and Jigawa states were given a clean bill of health. The six states that are in financial distress are: Kano, Sokoto, Niger, Zamfara, Katsina and Osun.
Those deemed critical are: Ekiti, Plateau, Benue, Edo, Borno, Adamawa, Cross River, Enugu, Taraba, Ogun, Kogi, Yobe, Ebonyi, Ondo and Kaduna.

In the unhealthy cadre are: Oyo, Bauchi, Bayelsa, Nasarawa, Gombe and Rivers while Imo, Kwara, Lagos, Kebbi and Delta were given the ‘tolerable’ tag. The data was sourced from the Nigerian Governors’ Forum (NGF) Labour Policy Report, 2011 as contained in a motion titled: Looming danger of bankruptcy in states: The need for fiscal evaluation, sponsored by Senator Olubunmi Adetunmbi (ACN, Ekiti North).

To forestall the looming catastrophe, the Senate advised the Federal Government to expeditiously review the revenue sharing formula in favour of states and local governments. The Upper Legislative Chamber also directed its Committees on Finance, National Planning; States and Local Governments to study the situation and submit remedial measures to avoid total collapse of the economy of the affected states. Senator Adetunmbi had alerted the Senate of the “great fiscal challenge and looming danger of insolvency as well as bankruptcy facing the states as a result of growing wage-bill associated with the implementation of the minimum wage and other recurrent responsibilities of the states.

“A recent research by the NGF revealed that 20 states face the prospect of unstable and unfavourable financial standing, given the high percentage of their wage-bills to the total revenue accruable to them. Armed with the data, Adetunmbi noted that in most states, the private sector is weak and unable to generate economic growth and jobs that are required, thereby making the states and local governments the largest employers of labour with attendant fiscal imbalance.

“The bulk of the revenue of these states is currently financing payroll of the civil service which constitutes less than 4% of the total population in all states; if this trend continues, many of the states would become financially insolvent and increasingly handicapped to finance real sectors and drive economic growth, job and improved livelihoods,” he said.

He told the Senate that “most state governments now rush to the capital market to raise long-term bonds to finance development projects”, which if misused, would spell doom for their future and the financial quagmire of states.
Some of the state governments that have taken this route of funding between 2002 and 2011 are: Lagos (series 1-N50bn; series II-N57.5bn), Imo (N18.5bn); Kwara (N17bn); Niger (N6bn); Bayelsa (N50bn); Kaduna (N8.5bn); Ebonyi (N16.5bn); Ogun (N50bn); Delta (N5bn) in 2007); Kebbi (N3.5bn) in 2006; Lagos (N15bn) in 2002 and Yobe (N2.5bn) in 2002.

Adetunmbi called for urgency in the review of the revenue sharing structure among the federal states and local governments in view of the “financial quagmire” of affected states. Contributing, Senate Leader Victor Ndoma-Egba, canvassed a merger of states and slammed the practice of state governments going cap in hand to Abuja for revenue, adding that, “there is federalism more in name than in practice.”

Also, Chairman of the Niger Delta Committee, Senator James Manager, re-echoed the call for merger of states and asserted that “all the states are distressed. Something has to be done. So many states are not supposed to be states because they have nothing to offer, they are burdens on Nigeria. Those not viable should be merged with the viable ones, hence, the imperativeness of fiscal federalism.”

Minority Whip Ganiyu Solomon noted that the revenue formula is long overdue for review, adding that there was too much concentration of power at the centre. Corroborating Solomon, Senator Ahmed Lawan submitted that the states were not getting their own fair share of the revenue, stressing, “it is totally unfair that the Federal Government should continue to get 53 per cent; it is not justifiable”.

Senator Sola Adeyeye queried the rationale for having “a Federal Ministry of Agriculture when there are no federal farms; communication, aviation, industry and housing when all the properties have been sold to the private sector.”
Thereafter, senators canvassed a review of the sharing formula from the Federation Account to further enrich the states and local governments as well as compelling the Federal Government to transfer some of its responsibilities to the lower tiers of government.


http://sunnewsonline.com/webpages/features/newsonthehour/2011/oct/28/newsbreak-28-10-2011-001.html

Politicians are paid too much, this needs to stop NOW!! Those useless politicians who steal everything should be paid less.

Its sad that the NASS is even considering the creation of new states when a full 75% of the states are a drain on resources. We cannot continue running the country this way. If we cannot go back to regions, then we need to implement the following drastic step for each of the groups.

Some of the states listed as distressed and critical are Kano, Sokoto, Niger, Zamfara, Katsina, Osun, Ekiti, Plateau, Benue, Edo, Borno, Adamawa, Cross River, Enugu, Taraba, Ogun, Kogi, Yobe, Ebonyi, Ondo and Kaduna.

Every single one of the above states needs to be merged, except Rivers.

States listed as unhealthy are  Oyo, Bauchi, Bayelsa, Nasarawa, Gombe and Rivers.

We can encourage the oil producing state above, Amaechi (Rivers) needs to borrow less and Sylva (Bayelsa) needs to go. Otherwise, they all need to be merged with more productive states as well.

Only 9 States, Imo, Kwara, Lagos, Kebbi, Delta, Abia, Akwa Ibom, Anambra and Jigawa are listed as being in a tolerable or healthy financial situation.

The above might be Nigeria's only viable states.

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Contributing, Senate Leader Victor Ndoma-Egba, canvassed a merger of states and slammed the practice of state governments going cap in hand to Abuja for revenue, adding that, “there is federalism more in name than in practice.”

Also, Chairman of the Niger Delta Committee, Senator James Manager, re-echoed the call for merger of states and asserted that “all the states are distressed. Something has to be done. So many states are not supposed to be states because they have nothing to offer, they are burdens on Nigeria. Those not viable should be merged with the viable ones, hence, the imperativeness of fiscal federalism.”

These might be the only diligent senators we have.

sales06302:

We are a manufacturer of tablet PC and laptop in Shenzhen, China.
Which engage in OEM and ODM tablet pc and netbook, with good
quality and pretty competitive price. We have been in the field for more than
10years.

Best Regards
Melissa
Run En Shenzhen Digital Technology Co., Ltd
Tel:86 0755-81712043
Fax:86 0755-29570381
Phone:13417510109
Web:www.androidrunn.com
Email:sales@androidrunn.com

Set up a factory in Nigeria first. Look up the Lekki free trade zone. It is a good place to invest.

Beaf:

Its sad that the NASS is even considering the creation of new states when a full 75% of the states are a drain on resources. We cannot continue running the country this way. If we cannot go back to regions, then we need to implement the following drastic step for each of the groups.

Every single one of the above states needs to be merged, except Rivers.


We can encourage the oil producing state above, Amaechi (Rivers) needs to borrow less and Sylva (Bayelsa) needs to go. Otherwise, they all need to be merged with more productive states as well.

The above might be Nigeria's only viable states.

Oniranu ni Beaf yii sha 

You wan merge my State with Zamfara and Borno abi? Sango pass you. I'll rather merge with where Oyel money dey. Thank you.

Jokes apart though, Beaf and the Senators are right IMO, we have too much government, too many governors, too many uneccessary admin centers called STATES. Most of them should be local Govts.

We only need a few regional hubs, at most (5) Power for taxation and utilities admin should go to their cities or local councils. If your taxes can't sustain you, then find a neighbor to merge with

But the question is: Where is the leadership??

We elected lawmakers and the executives to solve these problems not just talk about them. no? Why are they taking $2M salary with no results? Why?

^
The salaries of NASS members is the biggest single drain on the economy and they are an independent wing of govt thats so powerful, nothing can be done about it.
By the way, werin de wrong wit merging wit Zamfara?

^

We can do something about it.

Inspire us to start "beheading" them. Tell Oga Jona to start doing propaganda against them. People are ready. If he can't fight them he should inspire us to.

The people + executive presidential power = potent force



Na you go merge with Borno no be we. Shebi Una win the state now?

Kilode?!:

Oniranu ni Beaf yii sha 

You wan merge my State with Zamfara and Borno abi? Sango pass you. I'll rather merge with where Oyel money dey. Thank you.

Jokes apart though, Beaf and the Senators are right IMO, we have too much government, too many governors, too many uneccessary admin centers called STATES. Most of them should be local Govts.

We only need a few regional hubs, at most (5) Power for taxation and utilities admin should go to their cities or local councils. If your taxes can't sustain you, then find a neighbor to merge with

But the question is: Where is the leadership??

We elected lawmakers and the executives to solve these problems not just talk about them. no? Why are they taking $2M salary with no results? Why?

I thought you were a proponent of 'true federalism?'

How can you have true federalism when you are here advocating for the merging of states?

arsenefc:


I thought you were a  proponent of  'true federalism?'

How can you have true federalism when you are here advocating for the merging of states?

You can have true federalism with fewer states. No?

We have too many states. I'm proposing stronger cities and LG in the spirit of federalism.

States are not the Only components of a federal system outside the FG.

Look at taxes for example. I'll rather they are collected and managed at the local level than give everything to Abuja or Ibadan (in the case of Oyo State)

Well i love this but big question is that do you really think that those states that are regarded as not facing this financial crisis really are wort it?
If about twenty states are experiencing this financial down fall now, then i,m afraid about ten more states are going to join them up next year and in two years time, the whole 36 states will be in this mess, I'm sorry NIGERIA is in deplorable state.

^^^

@Kilode:

If we have too many states according to you, then we have too many cities, No? Since your point is to cut down on administrative expenses

If we go by your logic, merged states will inevitably lead to merged cities/LGs, and the result will be a system where the govt is not as close to the people as it should be in a truly federalist state.

Do i understand you very well?

arsenefc:

^^^

@Kilode:

If we have too many states according to you, then we have too many cities, No? Since your point is to cut down on administrative expenses

If we go by your logic, merged states will inevitably lead to merged cities, and the result will be a system where the govt is not as close to the people as it should be in a truly federalist state.

Do i understand you very well?

The difference is in the connection they have to the people and their size. Administratively, it's easier to manage cities than these states. That proximity also makes for better accountability which is central to this argument.

Gbongan yato si Ife, and should be treated as such.

Merged states don't mean merged cities, and there's nothing wrong with that actually. I.e if a city believe they cannot sustain themselves through the taxes generated, they can vote to merge. (Ikirun can vote to join Ibadan if they wish and proximity allows) It happens in many serious societies. But the nature of our federation prevents this type of creative and organic re-organization. Everything is too centralized, too controlled by the FG or State, too difficult to manage profitably. Decision-making is also too centralized.

Yes, cities can become big along the way, I'm fine with that, that's a natural process. As long as they are allowed the freedom to break up or merge without waiting for some federal constitutional amendment like we currently have.

We will still have regional hubs but not 36 all powerful mini-Nigerias managing too much and spending like crazies while staying so far away from our towns and cities that we can't monitor them or burn their houses when they mess up.

I think states should be merged, or some states broken up and shared among viable states.
Ebonyi can be broken up and shared between Abia and Enugu states; while some parts of Enugu and Imo should be ceded to Anambra state. Rivers should be broken up and shared between Bayelsa and Imo. Akwa Ibom should reabsorb Cross river state. Similar restructuring should happen in other geopolitical zones and regions.States should take on more responsibilities such as police.

Of course these ain't gonna happen. No be naija we dey?
The nonviable states can also be allowed to go bankrupt first, and then forcefully broken up and shared by the FG.

OMG
All SW states are either dead or dying?

But but but I can't be broke, because I still have more un-filled checks in my booklet.

We can run round the circle all we can but the answer lies in the vision of our founding fathers.

Nigeria was founded on regions and not states and until will go back to regions, nothing will work.
Not only that, we have to reverse all the crap we've changed during the military era and go back to square one as it was on 1st October, 1960, after that we make little adjustments. Period!

In the modern world, almost everything revolves around economy. Any arrangement that doesn't take cognizance of this simple fact is bound to fail.

The states in Nigeria were not created based on this rather on sharing mentality of oil-based revenue. No matter how much we try, we all have to face the reality one day. The idea of everybody going to Abuja to share is not sustainable.

I'm disappointed with some of you, have you no experience in management of entities ? I'll use something called the Niger - Spain analogy to explain something:
The republic of Niger probably is operating within it's budget right now, does that make it a better country than spain that might be in need of a bail out ?

Those ignorant leeches known as senators are either being deliberately mischievous or were misinformed. A state like cross river with high literacy level , with primary, secondary and tertiary institutions to fund, developed urban areas, health institutions and specialised staff in some areas, has not attained that level by not acquiring expenditure. Now compare that to a place like Jigawa with high mother infant mortality rate due to lack of health facilities, high illiteracy level, virtually no tertiary institutions, poor facilities and very few specialised staff, all which as a result translates to paying just a hand full of civil servants salaries at the end of the month.

Which of the two states above is really in dier need of help ?

i dont get this, how can Bayelsa be Unhealthy? Sylvia is definitely a crook.

The states are broke but the governors are not. What an irony!

All the States are broke, but the Governors are not broke

I Weep for my Nation

The Senetors and the Governors may start lending their states money

some of these broke states are caused by their Governors, though some of them are being prosecuted now, let them return the billions stolen and put the state back in proper shape